The Age in Melbourne says the Bush administration has more ideas for preventing a future credit crisis than for solving the current one.
The administration wants state regulators and private industry to tighten their oversight of financial markets. In effect, Bush wants states to issue nationwide licensing standards for mortgage brokers.
Lenders will need to make more complete disclosures about payment terms to home buyers.
"This effort is not about finding excuses and scapegoats," Treasury Secretary Henry Paulson said. "Poor judgement and poor market practices led to mistakes by all participants."
But in many ways, the plan relies on the same market participants — from mortgage brokers to credit-rating agencies and Wall Street firms — that government officials and other experts blame for the crisis.
The announcement came with a fresh round of worsening economic news that is reinforcing the view that the US economy has entered a recession.
Administration officials said most of the proposals would be executed in the coming months through regulations issued by federal banking and securities regulators, and by new committees run by industry executives. A few elements, such as tightening rules for mortgage brokers, might require federal legislation.
Democrat politicians described the proposal as light and late. Industry representatives welcomed the initiative.
Meanwhile, the greenback dropped to new lows against the euro and the yen. Lenders again raised interest rates on home mortgages. And fearful investors seeking shelter pushed the price of gold above $US1000 an ounce for the first time. The continued erosion of consumer confidence was reflected in a report that showed retail sales fell last month.
The confluence of bad news is testing the Administration and Congress as they struggle to respond to a slump that began with the mortgage market collapse.
Mr Paulson blamed growing market problems on a series of failures, including mortgage brokers who pushed risky loans on home owners, conflicts of interest at credit-rating agencies, bond underwriters that loosened standards, and financial institutions that failed to adequately grasp the riskiness of the instruments they were buying and selling.